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  • John McDonnell – 2022 Speech on Benefit Sanctions

    John McDonnell – 2022 Speech on Benefit Sanctions

    The speech made by John McDonnell, the Labour MP for Hayes and Harlington, in Westminster Hall, the House of Commons, on 13 December 2022.

    I congratulate the hon. Member for Glasgow South West (Chris Stephens) on securing the debate. I concur with all that has been said about his past work, both on the Work and Pensions Committee and more generally on this issue.

    I have a simple question to ask the Minister. What is his understanding of the increase in this recent period? It is true that conditionality has always been an element of our social security system since the second world war, but there has been nothing on this scale. What worries me is the dramatic increase—comparing the figures now with the figures before the pandemic—and therefore the significant increase in the past year after the worst parts of the pandemic. Like others, my experience of conditionality and the use of sanctions has largely centred on the impact on constituents who live the most chaotic of lives. They have difficulty complying with the various requirements that are made of them and, in some instances, actually even understanding the conditions that are attached to them. Living those chaotic lives means that they become intensely vulnerable.

    I will go through the figures again, so that I have this clear. The monthly universal credit sanctions reached a peak of 58,548 in March. They have now fallen back to an average of 45,100 in the last quarter—that is two and a half times the average in the three months before the pandemic, so there has been a 250% increase in that period. Sanctions as a percentage of UC claimants subject to conditionality are currently at 2.5% per month; in the three months before the pandemic it was 1.4% per month. The monthly sanction rate on unemployed UC claimants in July 2022 was higher, at approximately 2.8%—or one in 36 claimants—for those in the planning for work category. The number of UC claimants who were serving a sanction in August was 115,274, after a peak of 117,999 in July. That is more than three times the pre-pandemic peak of 36,771 in October 2019.

    It just goes on like that. The figures on the scale of the sanctions being imposed at the moment are quite staggering. According to the report by Dr David Webster, which I believe was produced for the Work and Pensions Committee, the average sanction is about 11 weeks. For most of my constituents, surviving beyond 11 weeks becomes almost impossible—even just getting by.

    Margaret Ferrier

    In response to a written question, the Minister said that data on the average length of sanctions

    “is not readily available and to provide it would incur disproportionate cost.”

    The length of a sanction is directly associated with the level of hardship faced by claimants. Does the right hon. Member share my concern that the Department is seemingly not tracking essential data that should inform policy making?

    John McDonnell

    I fully concur and agree. That is the main question that I will come on to. I will add that, although there was an increase in sanctions in the recent period, a lot of this concerns people being sanctioned for not seeking or being unable to increase their hours. We are now going into a recession—well, we are in a recession at the moment. Based on the Government’s figures, the Office for Budget Responsibility predicts that the number of unemployed people will increase by half a million, and the Bank of England suggests that it will most probably go above 2 million. It becomes much more difficult to find or secure work overall or to increase hours. That will increase the pressure on those who are already on the edge of being sanctioned.

    My fear, which has consistently been identified as a problem, is that the system is not working; it is not dealing effectively with people who have chaotic lives. There are some conditions attached and criteria that work coaches take into account, but in no way do they embrace fully the nature of the individuals they are dealing with. The decision maker never actually gets to see the individual either to do a proper assessment. When the individual comes to me in my constituency surgery and I get a fuller understanding of their life, I can understand why they have slipped up at some stage and why the system is not working to give them the support they need to get back into work and earn a decent income.

    Debbie Abrahams

    My right hon. Friend is making a powerful point. I will just pick up on what he said at the start of his speech about conditionality. There is currently no evidence that supports the efficacy—let alone the humanity—of sanctions at all. A University of York study, which was published in 2018, showed absolutely that they had no effect on out-of-work conditionality or on in-work conditionality. What is the purpose of this programme?

    John McDonnell

    I was going to come on to that. My question to the Minister is: what is his understanding of how this increase has taken place? What are the factors behind it, because it does then lead on to questions about the efficacy of the whole process? Looking at the excellent House of Commons Library briefing, we can see that there was a Work and Pensions Committee report in 2015, a National Audit Office report in 2016, a Public Accounts Committee report in 2017, the welfare conditionality project in 2018 and another Work and Pensions Committee report in 2018. All of them reached the same conclusion as my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams): there is no connection between this programme and effectiveness in supporting people getting into work. There is a bizarre situation: the raison d’être of this whole process has been challenged consistently—almost annually—by independent and objective reports, yet the Government have not moved. What does the Minister believe are the reasons for this increase?

    I would also like to ask another question. If the Minister cannot answer it today, I would like him to write to us with an answer. I am really worried about the impact that the sanctions and the whole process of conditionality has on the mental health of the constituents I deal with. I am anxious that the Government should at least assure us that they have in process a mechanism for monitoring that, learning lessons from that monitoring, then coming back to the House to explain what improvements will be made. I am worried about the mental health consequences because, as we go into recession and we have a cost of living crisis, people have a fear of sanctions being levelled against them, which pushes some over the edge. To be frank, we have seen too many people lose their lives, unfortunately sometimes as a result of suicide because of the pressures that they have been under as a result of these types of measures that have been introduced over this period. I would welcome the Government’s reassurance that there is monitoring of the mental health consequences and that there will be a report to the House about how that is being addressed and any lessons that can be learned.

  • Chris Stephens – 2022 Speech on Benefit Sanctions

    Chris Stephens – 2022 Speech on Benefit Sanctions

    The speech made by Chris Stephens, the SNP MP for Glasgow South West, in Westminster Hall, the House of Commons, on 13 December 2022.

    I beg to move,

    That this House has considered DWP’s policy on benefit sanctions.

    It is a pleasure to see you in the Chair, Mr Pritchard. I refer colleagues to my entry in the Register of Members’ Financial Interests, particularly my position as chair of the PCS parliamentary group as I will be mentioning some issues that appertain to staff who work in the Department for Work and Pensions. There are three components to what I want to raise this afternoon: the latest figures on sanctions, the policy itself and some of the challenges, and the pressures facing DWP staff.

    The latest figures on sanctions are shocking. In my written question 88916, I asked,

    “how many benefit claims were subject to sanctions in the last three months for which data is available by constituency; and how much was the (a) total and (b) average sum of benefit income lost by claimants due to sanctions in each constituency.”

    Members can refer to that particular written question and answer. In June 2022, just over £34 million was clawed back by the DWP in Great Britain. In July, it was £34.9 million and, in August, it was over £36 million, so the figures are increasing month on month. In Scotland, the August figure was £2.3 million, and in Glasgow South West the figure was £57,000. The average deduction in August was £262 a month, which is a considerable sum of money to deduct from someone’s social security. The figures suggest that the aggressive attitude we saw between 2013 and 2015 is back among us. The raising of the administrative earnings threshold means that 600,000 more claimants could be subject to a sanction, and that will include raising the number of people responsible for delivering the benefits being sanctioned, as I will come on to.

    We know the history of benefit sanctions. The coalition Government said their Welfare Reform Act 2012 would

    “lay the foundation for a clearer and stronger sanctions system that will act as a more effective deterrent to non-compliance.”

    They made changes in three main areas. First, they extended the scope of conditionality and sanctions within the same claimant groups. Secondly, they increased the length of sanctions for certain groups. Thirdly, they introduced the concept of escalating sanctions, with longer sanction periods for second and third sanctionable failures within a 12-month period.

    However, the then Secretary of State for Work and Pensions, Amber Rudd, had concluded that three-year sanctions were rarely used and were counterproductive, and ultimately undermined the goal of supporting people into work. The Work and Pensions Committee report in 2018 found that some claimant groups, such as single parents, care leavers and people with health conditions or disabilities, were disproportionately vulnerable to and affected by sanctions.

    Margaret Ferrier (Rutherglen and Hamilton West) (Ind)

    A few months ago, a vulnerable constituent contacted me after she had been sanctioned for missing an appointment, despite being assured that she did not need to attend it for very good and sensitive reasons. She was an older woman who had been through extreme trauma and who had no access to the internet and no mobile phone credit. Does my hon. Friend agree that a more humanised approach must be taken by the DWP?

    Chris Stephens

    I thank my good and hon. Friend for that intervention. I will mention similar specific case studies, and there are clear questions for the Department to answer on this matter.

    Going back to the Work and Pensions Committee 2018 report, it criticised the fact that a sanction incurred under one conditionality regime continues to apply even if the claimant’s circumstances change and they are no longer able or required to look for work. The report said that the sanction serves no purpose in such circumstances, and the Work and Pensions Committee recommended that it be cancelled. It further criticised the fact that the decision to impose a sanction is made by an independent decision maker

    “who has never met the claimant and who cannot be expected to understand fully the circumstances that led to them to fail to comply.”

    It therefore recommended that work coaches should be able to recommend

    “whether a sanction should be imposed”.

    The Government responded to the report and each of the Work and Pensions Committee’s recommendations in January 2019. They agreed to evaluate the effectiveness of reforms to welfare conditionality and sanctions, and said that it would be focused on whether sanctions within the universal credit regime are effective at supporting claimants to search for work. The Government said they would look to publish the results in spring 2019, but that did not happen, and DWP Ministers were still saying in July 2020 that the Department was committed to conducting an evaluation and that it would look to so by the end of 2020. In January 2022, however, The Guardian reported that the Department for Work and Pensions had refused a freedom of information request from Dr David Webster to release a copy of the evaluation.

    In February, it was reported to the Lords that the Department had not published its evaluation of the effectiveness of universal credit sanctions because it lacked robust legacy data. The former Secretary of State told the Work and Pensions Committee—in fact, it was in answer to the Chair, the right hon. Member for East Ham (Sir Stephen Timms), who is present—that she had noted that the evaluation had been commissioned by a previous Administration, and she explained that the notion of a sanction acts not only through its imposition on a claimant but, importantly, through its effect as a deterrent. That raises a couple of questions.

    Sir Stephen Timms (East Ham) (Lab)

    I am grateful to the hon. Gentleman for his points about the Select Committee’s report, and I pay tribute to him for his work on this subject. I understand that his membership on the Committee will shortly come to an end, but I thank him very much for all his work.

    The hon. Gentleman will have heard the new Secretary of State say that he will want to have a fresh look at whether some of the things that the Department has refused to publish in the past should have been published. Does the hon. Gentleman agree that this particular report should be high on that list of priorities?

    Chris Stephens

    It should be among the highest. I thank the Chair of the Select Committee for his very kind words, which I appreciate. I have enjoyed working with him, and he chairs the Committee very effectively indeed. He is absolutely correct to say there is a real question about reports that are currently unpublished but should be published, and I will come to some of them in my remarks.

    I would argue that the dugs in the street—or the dogs in the street, for those not from Scotland—could give us a comprehensive picture of sanctions and their effects on people. When I secured the debate, Feeding Britain and the Independent Food Aid Network asked for case studies and examples. I raised one with the Secretary of State at the Select Committee hearing about a Glasgow South West constituent who has been diagnosed with Asperger’s syndrome and severe anxiety, and who has extreme difficulty communicating with others. The local jobcentre applied a sanction after she failed to attend in-person appointments, despite the fact that, as part of a claim for employment and support allowance, it was agreed three years ago that reasonable adjustments would have to be made and that telephone meetings would be arranged for her. It raises the issue of the financial losses that occur, but the Department for Work and Pensions argued that there was no change of circumstances and that no sick notes were handed in.

    We also have the example of an individual in Motherwell. A young mother who had escaped domestic violence was sanctioned for failing to attend an appointment, despite the fact that she had advised the Department for Work and Pensions that she needed to care for her autistic child on that particular day.

    In the city of Liverpool, clients have commented that DWP job coach appointments have come through to their phone journals at times when they had no credit for data or access to wi-fi. By the time that each was able to afford to that phone data, they had missed the appointment and been sanctioned. Digital exclusion will increasingly affect clients who are unable to afford a basic smartphone and/or a contract for data access. They then face longer journeys to their jobcentre as a result of one of the busiest jobcentres in that city, Toxteth, being due to relocate, making access harder for local people.

    In Coventry, we are advised that the vast majority of sanctions are due to people not attending an appointment, but many are now told of their appointments through an online journal so, again, people with no access to internet are being told that they are going to be sanctioned.

    In Somerset, we hear of the case of someone with severe mental health issues and anxiety, whose job coach assured her that any correspondence would go to the principal carer. Ordinarily, she was informed of her appointments via a journal entry. The job coach cancelled a planned appointment and arranged a new one, but put it on that job coach’s to-do list, not through the online journal. This is an area that has to be looked at, because that person was subject to a sanction.

    Debbie Abrahams (Oldham East and Saddleworth) (Lab)

    Will the hon. Member give way?

    Chris Stephens

    I give way to my fellow Select Committee member.

    Debbie Abrahams

    I congratulate the hon. Member on securing this debate, and on all his work on the Select Committee. Is he as worried as I am that this is just a further iteration of the DWP sanctions issues going back to 2012? I particularly remember David Clapson, who was the first case that I came across—a former soldier who was sanctioned. He could not afford to keep his refrigerator on, his insulin went off, and he died as a consequence. Is the hon. Member as concerned as I am about sanctions potentially resulting in deaths?

    Chris Stephens

    I thank the hon. Lady, who is a good friend, for her intervention. She has done fantastic work in this area, which I very much support. I am concerned about the effects that sanctions have, and that the whole deductions policy has. The effect that taking money away from people has on cost of living payments is another real issue, which I will come on to.

    I would also add that, based on exchanges I have had with Ministers past and present, people can be sanctioned if they refuse a zero-hours contract job. Someone could be in a position where they have secure work, but less hours. The Department is encouraging people to increase their earnings, so if that person refuses a zero-hours contract and insecure work, they will be subject to a sanction.

    Then, we have the position of the DWP staff themselves. Some have received letters saying that they need to increase their earnings. It is no wonder that they are going on strike, is it? There is an anomaly here: many thousands of DWP staff are paid so poorly that they are claiming the same benefits they deliver, while sharing an office with someone who could then sanction them because they have not increased their earnings or their hours. I find that completely and utterly bizarre, and I hope that Ministers will look at PCS’s concerns and maybe treat the situation of DWP staff separately. It seems to me that the Department that is delivering social security should not be taking social security away from the people who are delivering it.

    Food banks across the Independent Food Aid Network see a newly hungry person referred as the result of a sanction every three days on average, so I have a number of questions for the Minister. Does he agree that the current sanctions policy is forcing people to use food banks if they are not to go hungry? To that end, will the Minister undertake to publish the Department’s evidence review on the drivers of the need for food aid, which was promised two years ago, yet remains under wraps? As the Chair of the Select Committee, the right hon. Member for East Ham, has outlined, that is one of the reports that remains unpublished, and it is something that we want to see.

    The Department’s own serious case panel agreed at its October meeting that

    “there should be further collaborative work undertaken through the appropriate governance routes to explore strengthening the mechanisms which protect our most vulnerable customers in respect of sanctions.”

    Will the Minister explain to us what that collaborative work will look like, and when it will take place? Will he also undertake to commission a study into any correlation that exists between the distance someone lives from their nearest Jobcentre Plus and the likelihood of them being sanctioned; the prevalence of poor mental health and vulnerability within households on universal credit and the likelihood of them being sanctioned; and the prevalence of digital exclusion within households on universal credit and the likelihood of them being sanctioned? We know that the Department has closed jobcentres; we also know that has made it more difficult for people to attend jobcentres and that they may be sanctioned for not attending a jobcentre.

    Will the Minister also provide an update on the Department’s most recent trials of the yellow card early warning system in two areas, including any plans to roll out that system further afield? I do not accept that there should be conditionality in the system, but if we are going to have conditionality it seems sensible to me that there should be a yellow card system, or some sort of warning system, in place before the decision is made to issue a sanction. Given that the present system seems to rely heavily on individual discretion, which is resulting in people becoming destitute, does he agree that a fully national roll-out of a yellow card system is needed sooner rather than later?

    As I have indicated, people being subject to a sanction could mean—indeed, has meant—that they do not receive their cost of living payment, but that decision could be reversed if they appeal and win their appeal. However, it seems to me that if there are 6,600 universal credit claimants who have missed out on that first cost of living payment because of sanctions, the Department for Work and Pensions should look at that situation. It seems to be a double punishment. The cost of living payment is in place so that people can meet their basic living needs and if they are sanctioned, it appears that there is something very wrong.

    Anne McLaughlin (Glasgow North East) (SNP)

    I agree with my hon. Friend that sanctioning people on the lowest of incomes at any time is grossly unfair, but at this time, when even many people in well-paid work are struggling to pay their bills, it is obscene. I had not been aware, so I thank him for highlighting it, that some people are not getting the cost of living payment that the Government say we need to survive.

    I congratulate my hon. Friend not only on securing this debate, but on asking the questions that led me to discover that this summer £153,000 was taken from my constituents by DWP sanctions. Will he join me in saying to his constituents, as I am now saying to my constituents in Glasgow North East, “If you have your benefits sanctioned, do not take it lying down. Contact me and I will fight this for you, because this is wrong and nobody should have to live on less than the minimum income”?

    Chris Stephens

    I thank my hon. Friend for that intervention and she is absolutely right. We are in a cost of living crisis. During the pandemic, the Department rightly took the view not to sanction people. We are now in a cost of living crisis, and if we did not sanction people during the pandemic, we should not sanction them during a cost of living crisis either. That seems to me to be a sensible approach.

    My hon. Friend is also correct in highlighting the great work that constituency office staff do in helping the most vulnerable to see off these attacks. We have all dealt with cases of people being sanctioned; I think that every single constituency office across these islands has had to deal with that.

    In closing, I will mention some of the staff concerns. There are concerns that jobcentres have been told by senior managers and Ministers to “up their game” when it comes to sanctions. There are very real concerns about the culture and certainly there is a view that there needs to be a mind-shift towards supporting people in what is important and that punishment has not achieved anything. There is very limited and patchy evidence that sanctions actually work.

    There is inter-office competition, whereby different offices’ statistics are compared, pushing for higher sanction and deferral rates, and labour market decision makers are using box-ticking exercises. Pressure is put on the work coaches themselves, through tighter timescales and pushing people to physically attend the jobcentre, with the harms that causes the long-term employed. There are also real effects on disabled claimants who are thrown into a group of those most likely to get a sanction, and the relative rate of sanctions for claimants with disabilities—all of that really needs to be explored further.

    Sanctions appear to be back with a vengeance, and that shift of approach requires parliamentary scrutiny. As someone who believes that conditionality has not worked, I think we need a change in approach to put the claimant and their needs at the heart of the social security system. The Department must accept the Select Committee’s recommendations to introduce either a yellow card system or another warning system, because failure to do so would mean the Department going back on its word in how it responded to previous Select Committee reports. I look forward to hearing whether colleagues have to say, including whether they accept—as I do—the need for change and reform.

  • Helen Whately – 2022 Speech on Government Funding for Research into Motor Neurone Disease

    Helen Whately – 2022 Speech on Government Funding for Research into Motor Neurone Disease

    The speech made by Helen Whately, the Minister of State at the Department of Health and Social Care, in Westminster Hall, the House of Commons on 13 December 2022.

    It is a pleasure to serve under your chairmanship, Mr Mundell. I begin by thanking the hon. Member for Kingston upon Hull East (Karl Turner) for securing this debate. I too pay tribute to Doddie Weir, an incredible man who sadly passed away at the end of November. My thoughts are with his wife Kathy, and their sons, Hamish, Angus and Ben.

    I had the good fortune to meet Doddie during an online roundtable—online because it was during the pandemic—and I was inspired by his campaign for a brighter future for people living with MND. His charity, the My Name’5 Doddie Foundation, works tirelessly to raise funds for research and provide grants to people living with this cruel condition.

    During the pandemic, and again since, I also met with my Mid-Kent MNDA branch as a constituency MP. Those meetings are vivid in my mind. The first call I had with them had literally everybody on the call in tears, as we talked about the experiences of those suffering with MND and their carers—usually family members—and how they were seeing their loved ones losing a bit of themselves day by day to MND. It is such a cruel disease, as the hon. Gentleman said. I am thankful to him and to several other Members of Parliament who have campaigned for research funding and actively lobbied me and other Ministers on that point.

    Chris Evans (Islwyn) (Lab/Co-op)

    I refer Members to my entry in the Register of Members’ Financial Interests, and I am a biographer of Don Revie. This is an important debate, because Don, who played for Hull City during his playing career, passed away from motor neurone disease in 1989. Like Doddie Weir and Rob Burrow, he played sport at a high level. If the Government are going to invest in research, will they look at the fact that sportsmen seem to be more likely than the rest of the population to develop motor neurone disease?

    Secondly, I urge the Minister to tell GPs to ensure that people are tested for motor neurone disease early in their journey, because the problem is that it is one of the last things people test for. In the case of Don, he believed that the pain in his back was caused by slipped discs—tragically, it was motor neurone disease. I ask the Minister to look into those two asks.

    Helen Whately

    The hon. Member makes two really important points. As he says, several prominent sportsmen who have been effective campaigners have sadly been affected by the disease, and there is a potential relationship with head injuries. He also made a point about the challenge of diagnosis, which I will take away.

    The hon. Member for Kingston upon Hull East rightly talked about the tenacity of campaigners such as Rob Burrow and how effective their visible campaigning has been at raising awareness of MND. The disease affects a significant number of people, with around 5,000 suffering from it right now. Sadly, we know that people do not live very long with MND, so a really significant number of people across the country are being affected over time. It is incredibly cruel for the individuals who suffer.

    I heard the request of the hon. Member for Kingston upon Hull East for a meeting, and I will come to some of the plans to address his calls in a moment. As I said, MND has a huge impact on those who have been diagnosed, and it is devastating for them and their families. We have made real progress in research, but we are yet to learn why motor neurones die off. There is still no cure for the disease and only one drug is licensed in the UK to treat MND, which is why the Government committed back in November 2021 to make at least £50 million available for MND research over the next five years.

    Before I go into more about research, I want to say something about how we are supporting people living with MND, which is a degenerative condition—often rapidly so—that requires complex and anticipatory care. For that reason, the majority of services for people with MND are specialised and commissioned nationally in the 25 neurological treatment centres across England. In the absence of a cure, we want to make sure that people with MND have access to the best health and care support available to meet their complex needs. It is really important for people suffering from MND and their carers to have specialised and targeted support, including devices to help people with MND to be able to continue to communicate effectively for as long as possible, as well as other types of care.

    Since November 2021, we have invested £790 million in the National Institute for Health and Care Research biomedical research centres, which bring together experts to translate scientific breakthroughs into treatments for patients. At the Sheffield centre, researchers have already pioneered evidence-based interventions to manage the symptoms of MND. In September, the Sheffield researchers published promising clinical trial results for the drug tofersen. Professor Dame Pamela Shaw, the director of the NIHR Sheffield BRC, said:

    “I have conducted more than 25 MND clinical trials and the tofersen trial is the first trial in which patients have reported an improvement in their motor function.”

    I want to emphasise that because, until now, it has been very hard to be optimistic about developing a cure for MND or even effective treatment. The trial is, in fact, grounds for optimism against this cruel disease.

    In June, the Government and charity partners invested in a £4.25 million collaborative partnership on MND, which includes LifeArc, the MND Association, the My Name’5 Doddie Foundation and MND Scotland. The Government are supporting groundbreaking research undertaken by the UK Dementia Research Institute. Seven of its 50 research programmes are dedicated specifically to MND, with world experts undertaking discovery science, translational and clinical research to drive medical progress.

    There has already been work going on to invest in MND research, but I heard the impatience of the hon. Member for Kingston upon Hull East and have heard from other hon. Members. Indeed, my hon. Friend the Member for Northampton South (Andrew Lewer), who is here today, has also lobbied me and other Ministers on the desire for greater pace and so that money goes towards research quicker and then translates more quickly into treatments.

    To that point, yesterday, we announced at the Department of Health and Social Care, together with the Secretary of State for BEIS, how we will deliver the full £50 million research commitment, which will build on our existing investments and successes to more rapidly fund MND research. In that regard, £30 million of Government funding will be invested immediately through specialist research centres and partnerships with leading researchers. That will include £12.5 million to the UK Dementia Research Institute to support groundbreaking research specifically into MND, a further £8 million investment into early-phase clinical research for MND via the NIHR biomedical research centres and £6 million for a translational accelerator that connects the DRI capabilities with those of the Francis Crick Institute, the Laboratory of Molecular Biology and the new MND collaborative partnership. We are investing a further £2 million in the MND collaborative partnership, which will specifically focus on data for MND research.

    Andrew Lewer (Northampton South) (Con)

    I am triggered by the reference to Francis Crick, who was also from Northampton, so there is quite a connection here, also given my great privilege to be the chairman of the all-party parliamentary group on motor neurone disease. I am grateful to the hon. Member for Kingston upon Hull East (Karl Turner) for having this debate, but particularly grateful to the Government for listening, making some really important announcements and pushing this forward. It has been received with great pleasure by the research community and MND sufferers. I hope the Minister will accept my thanks for that. I look forward to working further with her in taking this forward, now that we have the new announcements.

    Helen Whately

    It is good to hear from my hon. Friend. Credit goes to him for his campaigning, both personally and as chair of the APPG on motor neurone disease, together with that of other Members of Parliament, to push for investment to get out to the frontline on research. I look forward to working with him further so we can ensure this investment in research makes a difference for people suffering from MND and their carers, and for those in the future.

    I have just mentioned the MND collaborative partnership, which is a mechanism by which the many initiatives that I just described will come together. The first meeting of this virtual institute took place at the end of November, and I am looking forward to hearing about further progress now that the funding is in place. The remainder of the committed £50 million of MND funding is available for researchers to access via the NIHR and the Medical Research Council. Government will support researchers in coming forward with ideas for new research via a joint highlight notice between NIHR and the Medical Research Council on MND. That will allow our funding to be responsive to progress in science and ensure breakthroughs reach patients in the quickest possible time. Further to that, the Secretary of State will shortly host leading researchers and patient groups at a roundtable to discuss MND research and help researchers make the best bids as quickly as possible. That addresses the call for a meeting from the hon. Member for Kingston upon Hull East.

    Karl Turner

    I am grateful to the Minister and I welcome everything that she has helpfully just announced. However, my researcher spoke yesterday to the association and it still requests that meeting. It is the only ask. I accept what she says about roundtables and all sorts of other things going on behind the scenes, but the association wants a meeting with the Secretary of State for Health and Social Care and the Secretary of State for Business, Energy and Industrial Strategy. Perhaps it is difficult to get them together, so there could be separate meetings. That is the only thing the association has asked me to ask for today, so it would be remiss of me if I did not push her to request that meeting after she leaves here.

    Helen Whately

    The hon. Member’s request is very clear. As I said to him a moment ago, the Secretary of State for Health and Social Care will meet researchers and patient groups at a roundtable about this issue. If that is not the same meeting as the one he wants, I am very happy to take that point away and find out exactly what meeting he wants and how we can make sure that it takes place as well as the planned meeting.

    I have heard from my hon. Friend the Member for Northampton South over the past few weeks about red tape getting in the way of research, which we clearly do not want to be the case. To help cut red tape, research funders from NIHR and the Medical Research Council are working together so that MND proposals will go to the right scheme at the early idea stage and so that applications can be considered before they even have full sign-off from their universities and institutions.

    We are also building on our recent announcement of £790 million for the NIHR biomedical research centres by putting in MND funding, so that it gets quickly to the most promising researchers already working on MND.

    To sum up and return to where we started, there is no doubt that MND is a cruel disease that takes people before their time and, as it does so, takes them bit by bit from their loved ones. As yet, there is no cure. However, I say “as yet” because I have hope, and we have real grounds for optimism with the clinical trials. We also have £50 million going into MND research. I have outlined today how we are accelerating that funding to go to the frontline of research and to develop the treatments that will make a difference to MND sufferers, whether here and now or in the future.

    In no small part, that is thanks to the late Doddie Weir and his family, Rob Burrows, Ed Slater, Kevin Sinfield, and all the other MND campaigners and carers who have worked so hard to raise awareness of MND and push for more action on MND research. I can assure them that their efforts are not in vain. I personally take inspiration from all their tireless work, which reinforces the Government’s commitment to fund and support research into MND. We owe it to people with MND, future sufferers, and all the campaigners and researchers to push ahead with the groundbreaking research that will help to develop effective treatments and, indeed, cures for this cruel disease.

  • Karl Turner – 2022 Speech on Government Funding for Research into Motor Neurone Disease

    Karl Turner – 2022 Speech on Government Funding for Research into Motor Neurone Disease

    The speech made by Karl Turner, the Labour MP for Kingston upon Hull East, in Westminster Hall, the House of Commons, on 13 December 2022.

    I beg to move,

    That this House has considered Government funding for research into motor neurone disease.

    It is an absolute pleasure to serve under your chairship, Mr Mundell. MND is a devastating, debilitating and untimely life-limiting disease. We saw that just two weeks ago with the tragic loss of Doddie Weir, to which you have referred. Doddie was a giant of a man, both on and off the field, but the MND Association estimates that in the UK six people a day die of MND. A third of them die within 12 months of diagnosis, but it is now more than a year since the Government pledged—in response to the tireless efforts of campaigners and following meetings between me and the then Business Secretary, the right hon. Member for Spelthorne (Kwasi Kwarteng)—to invest £50 million. We met the Secretary of State that day with campaigners, and he gave an assurance to us all that immediate action, meaning immediate money, would be forthcoming. It was not.

    Jim Shannon (Strangford) (DUP)

    I thank the hon. Gentleman for bringing forward this important issue. I have a close working relationship with MND campaigners back home, and ahead of the debate they got in touch to point out the lack of adequate care and provision in Northern Ireland. The Department of Health back home needs help to improve the standard for accessing clinical trials, and the same applies for people across the UK. Does the hon. Gentleman agree that it is imperative that people in all parts of this great United Kingdom of Great Britain and Northern Ireland are able to gain from research and be involved in clinical trials? We all stand to gain from that.

    Karl Turner

    I agree with the hon. Gentleman, who is an incredibly impressive campaigner on the issue. I pay tribute to him. He is knowledgeable on the subject, and he raises it both publicly in debate and privately with Ministers when given the opportunity. I commend him for that.

    I very much welcome the Secretary of State for Health and Social Care commenting at the weekend that the money will be fast-tracked into the hands of researchers, but I am sorry to say that it feels as though the Government have dragged their feet. They have been dragged kicking and screaming to this point by the impressive dedication of MND campaigners—not least Rob Burrow, who is a rugby league legend—and it is disappointing that we have had to wait 12 months for anything. This debate was secured, then there was talk in the media that there would be funding available, but campaigners are entitled to be a little concerned and a little nervous about where and when that money will be forthcoming.

    I pay tribute to the campaigners. I have briefly mentioned Rob Burrow; for all his brilliance on the pitch, the whole rugby league community has been blown away by his determination to raise awareness of MND. It is his tenacity that has brought us to where we are today. I have to be honest that I knew very little about MND. I am a rugby league fanatic; I support both of the rugby league teams in Hull. I am bound to say, being the Member for east Hull, that I support the red and whites a bit more than the black and whites on occasion. Rob is the person who brought this to my attention. Special mention should also be given to Rob’s former teammate and best pal, Kevin Sinfield, who has completed seven ultra-marathons in seven days to raise about £1.5 million for MND charities. That is an incredible effort from an incredible campaigner and man.

    This debate was secured before the Secretary of State announced the money at the weekend. I want to mention that I have spoken with the MND Association at length, and my office has spoken with it in preparation for this debate. It has one single ask. It desperately needs a meeting with the Secretary of State for Health and Social Care and the Secretary of State for BEIS, so that it can get a timeline and some understanding of when the money will be made physically available. It is no good promising money and then not delivering it. The promise was made more than 12 months ago—nothing has been forthcoming.

    I am quite annoyed at the fact that the debate was secured, and all of a sudden there is discussion in the media that the money is coming. People are asking me whether it means 50 million quid last year and 50 million again this year. The reality is that it is 50 million quid, which is much needed—the association and campaigners are grateful for it—but they need to know when and how the money is going to be made available.

    I am going to rest there; I do not think I have anything further to add. It is a simple ask: will the Minister agree to speak to the Secretaries of State concerned and put the meeting together as quickly as possible, so that we can move forward?

  • Victoria Atkins – 2022 Speech on Business Rates and Levelling Up

    Victoria Atkins – 2022 Speech on Business Rates and Levelling Up

    The speech made by Victoria Atkins, the Financial Secretary to the Treasury, in Westminster Hall, the House of Commons, on 13 December 2022.

    It is a pleasure to serve under your chairmanship, Mr Mundell, and I congratulate my hon. Friend the Member for Waveney (Peter Aldous) on securing this important debate. I am delighted that on our side of the House we have so much of the English coastline represented—I include myself in that, proud as I am to represent the Lincolnshire coastline.

    I am also delighted to be joined by the hon. Member for Strangford (Jim Shannon). I had many a happy time sailing in the famous Strangford lough in my childhood, and I know how important tourism and hospitality is to his constituency. I thank him for sharing his Northern Irish perspective, as he always does.

    I hope colleagues are aware that the Government announced a significant support package for business rates in the autumn statement, and I welcome the opportunity to set that out. I also welcome the opportunity to discuss the substantial reforms to which we have already committed, which will make the business rates system fairer and more responsive to changes in the market. We have heard the concerns expressed about the status quo not just by hon. Members today, but by businesses in previous years. I will address some of those concerns and emphasise our keenness to make changes where appropriate.

    Forgive me if first I go back to basics. The importance of business rates to public finances is perhaps lost in the understandable concerns raised about the impact on constituency businesses. Taxes on commercial property remain an important part of a fair and balanced business taxation system. Most advanced economies, including most OECD members, have a business property tax. Business rates raise over £20 billion a year in England alone. That money goes to fund vital public services—a priority that the Chancellor emphasised again and again in the autumn statement. Put simply, we do not believe that there is an alternative with widespread support that would raise sufficient revenue to replace business rates. For those reasons, we do not consider there is merit in a radical overhaul or abolition of business rates, but we have delivered meaningful change to improve the system and have continued to conduct several reviews on the issue. Those reviews reaffirmed the importance of business rates and concluded that they have several key advantages over other taxes. They are relatively easy to collect and hard to avoid, with a collection rate of around 98%, making them a vital and stable source of funding for local services.

    My hon. Friend the Member for Waveney suggested that the current tax rate discourages investment in new spaces and expansion of existing spaces, but there is little evidence of structural issues in property investment in the UK. As he would expect, we keep a close eye on that. We have the highest share of investment going to non-residential buildings of any member of the G7. We recognise the valuable role that businesses play in our economy and we have taken action to support them through the business rates system.

    Kevin Foster

    I find the Minister’s response interesting. She talks about the investment in commercial property—for example, we are seeing £140 million of investment in Torbay hotels. The issue is not so much the overall level of investment in commercial property, but the specific locations. We might have 34 million seafront hotels in Paignton, but in the town centre, which was once the main focus for the collection of business rates, we are struggling to get anywhere. Does she think there might be a link?

    Victoria Atkins

    Goodness me, I would not pretend to have an intimate knowledge of the economics of Torbay. My hon. Friend knows his constituency extremely well, but the realistic fact is that businesses in his high street have to pay taxes of some sort. That is why we have tried to mould the business rate support package to help the businesses that need it the most, which we recognise are those in the retail, hospitality and leisure industry. I will come on to that particular support, which is a very generous package that I hope will be of great benefit to businesses in his constituency.

    We have a duty to ensure that the business rates system is fair and responsive, while raising sufficient revenue to support the public services that I have already talked about. Since 2017, when the Government doubled the 100% small business rate relief rateable value threshold from £6,000 to £12,000, a third of properties in England have paid no business rates whatever. In my own constituency, I know of many properties in my market towns that pay no business rates precisely because of that protection and they are, I hope, thriving as best they can as a result.

    The Government provided £16 billion in business rates relief for the retail, hospitality and leisure sectors during the pandemic because it was such a difficult time for them when the economy was essentially closed down. That was an unprecedented level of support for the high street, on which so many communities depend. From my own constituency, I know how vital that support was in keeping businesses’ heads above water during the lockdowns. The Government also provided a £1.5 billion covid additional relief fund for businesses that were affected by the pandemic but which were not eligible for other reliefs. Local authorities, due to their knowledge of their local areas, were responsible for designing and establishing those schemes. Progress has been in line with our expectations, and final distribution data will be published on gov.uk shortly.

    As the Chancellor stated in the autumn statement last month, it is an important principle that revaluations should reflect market values. Hon. Members have emphasised that point during the debate. The 2023 revaluation will therefore go ahead. From April 2023, all rateable values will be updated for all non-domestic properties, with evidence from April 2021. This will mean initial bills will reflect changes in market conditions since 2015, and will ensure a fairer distribution of the tax burden between online and physical retail.

    The hon. Member for Strangford asked me why the Government have not introduced an online sales tax. He will know that we launched a consultation on the issue earlier this year. We received many responses, which will shortly be published, but it is fair to say that there was not unanimity. Indeed, there was not even agreement—I would not put it as highly as that—as to what such a tax should look like, because many of even the smallest businesses on the high streets of our constituencies now have some form of online presence. It may not be the main part of their business—that may be the shop—but, understandably and laudably in the 21st century, they are trying to diversify by having an online business.

    Nobody could quite see how we could differentiate between the enormous multinationals that we are all keen to ensure pay taxes and those microbusinesses that my hon. Friend the Member for Waveney described so well. That is why in the autumn statement the Chancellor decided against an online sales tax, with the important caveat that the changes we are making to business rates, including with the revaluations, will mean that the distribution warehouses, which supply the multinationals that we are all keen to ensure pay their proper taxes, will see significant rises in their bills while we also protect the shops and microbusinesses to which he referred.

    Jim Shannon

    That is a very helpful response, as always; I expected nothing less. I will take the Minister’s point of view out of Hansard and give it to some microbusinesses in my constituency that have asked me these questions. I understand there is a wish for this revaluation to happen, and I understand the difficulties and complexities the Government face to get it over the line. If I could come back to the Minister directly with some thoughts, maybe we could see if we could review it in a positive way.

    Victoria Atkins

    Of course. I am always delighted to hear from the hon. Gentleman. He will appreciate that there are many other factors; for example, click and collect was a stumbling block for many in the consultation. I look forward to his future correspondence.

    The support package that we have introduced means that the revaluation will go some way to addressing the imbalance between online and offline retailers. On average, large distribution warehouses will see an increase in bills of about 27%, and bricks and mortar retailers will see decreases of about 20%. We recognise that business rates payers may feel uncertain about the upcoming revaluation, given other pressures the country is facing that are driven by global challenges.

    Rising prices around the world, made worse by Russia’s illegal invasion of Ukraine, have hit businesses hard. In the autumn statement we announced the steps that we will take next year to provide support through these difficult times. We will deliver a business rates support package worth £13.6 billion over the next five years. That will protect businesses from facing large bill increases because of high inflation and rateable value increases following the revaluation.

    My hon. Friend the Member for Waveney urged the Treasury to cut the UBR to the 1990 level of 35p, showing the trade-offs that the Government must make. Doing so would cost £9 billion a year, which would be a significant potential loss to the public revenue. We have thus taken the steps we have through the support package to protect ratepayers from high inflation, and we are instead freezing the tax rate for three consecutive years at a cost of £14.5 billion.

    My hon. Friend the Member for Torbay (Kevin Foster) described the vibrant hospitality sector in his constituency. We are extending and increasing the retail, hospitality and leisure relief scheme from 50% to 75%, up to a cash cap of £110,000 per business. Pubs and the holiday parks he referenced are included.

    Peter Aldous

    I am conscious that I will have the opportunity to respond at the end of the debate, but I want to pick up now on one specific point that the Minister has mentioned. She said that the Treasury had carried out an assessment and if we were to go back to the UBR of just over 30p from when this system was introduced in 1990, that would cost an extra £9 billion. Did that assessment take into account a situation in which we had annual revaluations as well? If we had annual revaluations, that sort of margin would be much lower and we would fairly redistribute the burden of business rates across the UK.

    Victoria Atkins

    I will come back to that point, and particularly the detail on annual revaluations, because I think there is some sympathy with my hon. Friend’s point of view.

    The retail, hospitality and leisure relief scheme is the largest business rates one-year relief we have provided in 30 years, so I encourage colleagues to ensure that their local businesses know that the Conservative Government are delivering for those businesses. It will support about 230,000 properties—not just on high streets, but beyond high streets, as my hon. Friend the Member for Torbay emphasised. Therefore, although I understand the point made by my hon. Friend the Member for Waveney regarding the temporary nature of these interventions, permanent changes have been announced and will provide support for affected businesses.

    We will deliver on a key ask by trade bodies such as the CBI, the Federation of Small Businesses and the British Retail Consortium by permanently removing downward caps from transitional relief, which previously restricted falls in bills. Removing those caps permanently means ratepayers seeing decreases in their rateable value will experience a full drop in their bills next year.

    Taken together, the revaluation and the support package have updated bills to reflect market conditions. Those facing bill increases will see them phased in through transitional relief, and the small businesses that make up our high streets will be protected through targeted support. The multiplier freeze will protect all ratepayers against double-digit inflation.

    Colleagues were keen to emphasise the important role that pubs play in our communities. As a proud Member of Parliament for many excellent pubs in my constituency, I understand their concerns. It might help colleagues if I lay out the forms of help that pubs will receive through the support package. As a result of the package of support, pubs’ bills have fallen by about 30%. All pubs will benefit from the multiplier freeze, and pubs with falling rateable values will benefit from the removal of the downward cap that I just described. They will also be eligible for the 75% retail, hospitality and leisure discount. Of course, small pubs that have a rateable value of below £12,000 pay no rates at all.

    Would my hon. Friend the Member for St Ives (Derek Thomas) be kind enough to write to me about his dry dock example? That business will receive some form of help through the overall package.

    Let me turn to business rates reforms. We understand and listen to the concerns of those running businesses, and keep the operation of all tax policy under review. In the 2021 autumn Budget, we announced the outcome of the business rates review, and will shortly bring forward legislation to deliver those reforms. A core element of that package is more frequent revaluations, moving to revaluations every three years instead of every five; my hon. Friend the Member for Waveney is smiling at me. That represents significant reform, and will ensure that the system is more responsive to changing market conditions.

    To enable those reforms, we are also introducing some administrative measures, including a new information duty on ratepayers to ensure the VOA has sufficient data to accurately update rateable values every three years, and to help reduce the number of appeals and the time taken to resolve them. The changes will also unlock opportunities for further improvements to the system in future, such as even more frequent revaluations. We understand the merits of annual revaluations, but we need the change to three years to settle in a little bit, because even moving to three years represents significant operational complexity, but we very much understand the wish for annual revaluations.

    My hon. Friend the Member for Waveney mentioned the wish for increased transparency by the VOA, which I understand. I sympathise with the issues that ratepayers are facing through the “check, challenge, appeal” process. The Government are keen to address those issues by delivering on the commitments made in the business rates review. Accordingly, there is already a plan in place that is providing ratepayers with better access to improved information about how valuations are carried out. I urge my hon. Friend to pass to me any information he or others may have about the unscrupulous agents he described; I am most concerned about that, and will be very interested in that information, because I am looking at the role of agents across all aspects of tax policy. A lot of agents provide a very good service to their customers, but we must weed out those who are unscrupulous or even worse.

    In the longer term, we expect ratepayers to be able to access fuller analysis of the evidence used to set the rateable value of a property, which I hope will in turn restore confidence in that system. We keep all business rates reliefs under review, as the system of reliefs plays a vital role in ensuring the overall sustainability and fairness of tax. The Government ensure that reliefs are as easy as possible for ratepayers to navigate, with several being automatically applied by local authorities, such as transitional relief, supporting small business relief, and empty property relief. Comprehensive guidance on reliefs is available on gov.uk.

    Through the review—which I encourage the hon. Member for Ealing North (James Murray) to read; perhaps he has not realised that we have done it—we have committed to several measures to modernise and digitalise the business rates system, including further investment in the Valuation Office Agency to enable it to upgrade its IT infrastructure and digital capabilities. The review recommitted to the digitalising business rates reform programme, which will match business rates data with central HMRC tax data to provide a better oversight of the rates system, more precise targeting of reliefs, and more effective compliance.

    At the very beginning of the autumn statement, the Chancellor told the House that he had three key priorities:

    “stability, growth and public services.”—[Official Report, 17 November 2022; Vol. 722, c. 844.]

    We understand that the issue of business rates cuts across all three of those priorities because of the impact it has on our high streets and the money it raises for our vital public services.

    As ever, this is about balance. We acted at the autumn statement to support business and we will deliver on the reforms announced at the 2021 business rates review through upcoming legislation. We will continue to listen to the arguments, but we will also continue to make the decisions we think are in the interests of the country as a whole. I thank hon. Members for their contributions and look forward to engaging with them all to ensure that this continues to be a system that serves us all.

  • James Murray – 2022 Speech on Business Rates and Levelling Up

    James Murray – 2022 Speech on Business Rates and Levelling Up

    The speech made by James Murray, the Labour MP for Ealing North, in Westminster Hall, the House of Commons, on 13 December 2022.

    It is a pleasure to serve under your chairmanship, Mr Mundell. I begin by congratulating the hon. Member for Waveney (Peter Aldous) on securing this important debate on business rates. I am pleased to respond on behalf of the Opposition.

    We know that there are around 5.6 million small businesses in the UK, creating millions of jobs and opportunities. They provide essential services to local people, and make a significant contribution to the Exchequer. Businesses on high streets across our country are not just places to buy things we need. They are also an important part of where we live, work and share our daily lives.

    While business rates affect businesses of all sizes, smaller businesses often struggle the most to meet those costs. They face the burden of an outdated system of business rates, while struggling with rising energy costs, rents or mortgages, and inflation, as well as the ongoing impacts of the pandemic and the September mini-Budget. Data released by the Office for National Statistics shows that the number of business closures in the UK in the first quarter of 2022 was a shocking 137,210 which is 23% higher than the equivalent figure in the first quarter of 2021.

    As the shopkeepers campaign has highlighted, the existing business rates system in England has become disconnected from the realities of modern retail and retail real estate. As the campaign explains, business rates in England were 87% higher in March 2020 than they were in 2001, whereas retail rents rose by only 17% over the same period. As it also points out, business rates have not responded effectively to evolving consumer and economic trends, not least the rapid growth of online retailing, and equitable business rates liabilities are the result of infrequent and delayed revaluations under a system that acts as a barrier to investment. Such views are echoed by the 2018 Confederation of British Industry report, “A Tax System that Enables Businesses to Invest and Grow”, which states:

    “In an increasingly digitalised word, it has never been a more crucial time for the Government to act and set out a path for reform to the broken business rates system.”

    I am sure the Minister will recall the 2019 Conservative manifesto, on which the party stood for election. Specifically, page 32 promised:

    “We will cut the burden of tax on business by reducing business rates. This will be done via a fundamental review of the system.”

    We recognise that any help for businesses that are struggling is welcome, and we recognise that the UBR has been frozen, relief extended into 2023-24, and downward phasing abolished. However, it seems that the promise of fundamental reform has now been abandoned. It seems that the Government have abandoned their promise fundamentally to address the imbalance that affects bricks-and-mortar businesses, which find themselves at a significant disadvantage compared with their online counterparts, whose warehouses typically attract considerably lower business rates.

    My colleagues and I believe that the current system of business rates should be replaced to meet the needs of a modern economy. Last year, my right hon. Friend the Member for Leeds West (Rachel Reeves) announced that a future Labour Government would replace the current system of rates with a new system of business taxation that is fit for the 21st century. We will set out our plans before the next general election, and such a system will involve more frequent revaluations—a move that many people have been urging for years. It will be a fairer system that asks online giants to pay a fairer share, so that small, local and high-street businesses in all parts of the country can thrive. Ahead of fundamental reform, we also believe that the same principle of rebalancing the burden of tax in the system should apply, which is why we have set out our plans for an increase in the threshold for small business rates relief, funded by an increase in the rate of the digital services tax.

    We know that partnership between the Government and businesses is critical to economic growth, but it has been lacking in our economy for so long. We also know that small businesses have been held back, particularly by an outdated system of business rates, for many years. To increase growth in all parts of the UK, the Government should support small businesses to invest, grow and create jobs.

    As the shadow Chancellor has set out, Labour will carry out the biggest overhaul of business taxation in a generation so that our businesses can thrive. Our replacement system will shift the burden of business taxation so that online firms take a fairer share, while freeing those that rely on bricks-and-mortar premises. Our new system will incentivise investment and include more frequent revaluations and instant reductions in bills where property values fall. It will reward businesses that move into empty premises and encourage, rather than penalise, green improvements to businesses. It will also make sure that no public services or local authorities will lose out from the changes.

    Labour’s approach will be based on working together, with businesses, workers and public bodies all pulling together to rebuild Britain and to seize the opportunities of the future. A Labour Government will help to breathe new life into our high streets by calling time on the outdated model of business rates, so that British businesses in all parts of the country can play their part in creating economic growth and the jobs of the future.

  • Derek Thomas – 2022 Speech on Business Rates and Levelling Up

    Derek Thomas – 2022 Speech on Business Rates and Levelling Up

    The speech made by Derek Thomas, the Conservative MP for St. Ives, in Westminster Hall, the House of Commons, on 13 December 2022.

    It is a privilege to speak under your chairmanship, Mr Mundell. I thank my hon. Friend the Member for Waveney (Peter Aldous), for bringing this subject—a pet subject of mine—to the House once more. I am glad that the debate is called “Business Rates and Levelling Up”, because I want to pick up on both of those, and include the VAT threshold within the levelling-up issue, because it is absolutely relevant to my constituency.

    Much of what has been said today does not come as a surprise, but every opportunity to argue for a reform of property-based taxes is one that we should seize. As I said, I will touch on business rates and levelling up in relation to the VAT threshold. I do not think I am alone in the view that business rates are arbitrary, taxing the existence of a business within a building, irrespective of its economic activity. It is unfair and discriminates against large independent businesses, especially in town centres, and favours—in my view—out-of-town and online businesses.

    I believe that business rates should be scrapped altogether and replaced, although I know that I differ from my hon. Friend the Member for Waveney on that. We should have the courage to replace business rates with a system that taxes in-town, out-of-town and online equally and fairly.

    I have a great news story from my constituency. In Penzance, we have the oldest working dry dock. It is a fantastic business, and Members are welcome to come and see it. It is an amazing bit of infrastructure—donkey’s years old, and quite leaky, which does not really work for a dry dock. However, it would not be there—there is still a real risk of closure, partly because of businesses rates—if not for a local individual, a young man, who decided that it needed to be saved and wanted to have a go at it.

    The dock was threatened with closure, but he has secured that business and all the jobs and skills there—and increased them—and is spending a huge amount of money on the infrastructure, trying to plug the holes and level the floor of the massive engineering workhouse. It is a fantastic piece of marine engineering, which is vital, and strategically important for the British coastline, particularly Cornwall.

    That young man has invested significantly in that old facility, although much more is needed. New jobs and apprenticeships have been created and significant services have been secured and enhanced for marine engineering, and shipping more generally. However, it operates in a highly competitive market and he must find £4,000 a month just for business rates. That is undermining, as we speak, its ability to be competitive, as he needs to pour money into bringing the facility up to where it should be.

    It is actually more tax-efficient—if that is the right phrase to use—to close that strategically important dry-dock facility in favour of housing or hospitality. I have done a lot of work with Cornwall Council, which says that there is nothing that it can do, but we are working to find a way to give that dry dock a level playing field with others in the area, which benefit from an enterprise zone arrangement.

    I will move on to levelling up, particularly to the obstacle of the VAT threshold. In a rural coastal area where so much of the economic activity, and jobs supporting it, are compressed into the tourist season—many MPs share that problem—effort has been made for years to extend that activity. In west Cornwall, we have worked hard to extend the tourist season into the shoulder months—much earlier and later in the year. I am sure that is true in other coastal areas. That would increase economic gain, jobs wages and skills; it would provide job security, if nothing else.

    However, we have faced challenges as we try to do that. There is an acute issue on the Isles of Scilly where, as we try to increase the shoulder months, we come up against the understandable need that small hotels, guest houses and restaurants have for curtailing their business. As they get closer to the VAT threshold, which I think is about £85,000, they will either close or slow down their business to avoid that threshold. The simple reason is that the minute they go over the £85,000 threshold, even by £1, they are clobbered for £9,000 of VAT. They would have to earn another £45,000 in order just to stand still. The problem with a small hotel is that it just does not have the beds, particularly in the shoulder months or the winter, to grow business to that extent.

    Unfortunately, the inevitable and sensible decision for many businesses in Penzance and in my coastal community on St Mary’s on the Isles of Scilly is to close. That immediately puts other businesses in the area at risk, contributes to job insecurity and the challenges we face around that every year, hollows out communities, and threatens transport links. We tried to increase the transport running to and from Scilly in the shoulder months, but it was just not viable because people were booking the ferry, but were then unable to find accommodation or places to eat. It is a real challenge, which I have raised many times since I was elected. The last answer I received was that it was going to be looked at in 2024, but I think that might have been pushed further into the future.

    Those businesses cannot grow and they would need to earn another £45,000 just to stand still—that is not an incentive for someone to work in the winter, supporting our local economy but with no gain for their business. As a result, we have a real problem in coastal areas. It is harming our ability to level up and to provide good, skilled jobs. We have seen during and following covid that jobs in hospitality and tourism are beginning to be reasonably well paid and more skilled, but they are not secure, partly because of this problem. There is thus a direct impact on job security, other businesses, transport and so on. I am not sure if this is the right place to raise it, but the simple fix is that when a business reaches the £85,000 threshold, VAT should be applied to all money earned above that. It is so simple and obvious that I am not sure why the Government do not do it.

    In conclusion, I differ from my hon. Friend the Member for Waveney; tweaking business rates has actually increased unfairness and depressed growth and aspiration —that is the experience in my constituency. Business rates should be scrapped in favour of a tax that reflects the economic activity, not the building the business occupies. To support levelling up, serious consideration must be given to the chilling impact of an arbitrary VAT threshold.

  • Jim Shannon – 2022 Speech on Business Rates and Levelling Up

    Jim Shannon – 2022 Speech on Business Rates and Levelling Up

    The speech made by Jim Shannon, the DUP MP for Strangford, in Westminster Hall, the House of Commons, on 13 December 2022.

    It is a pleasure to speak in the debate, Mr Mundell; I thank the hon. Member for Waveney (Peter Aldous) for setting the scene so very well. He and I, and others in the debate today, often join forces to support our communities. His and my communities are similar in their culture and geographical stance, and we share an interest in fishing issues. It is always a pleasure to come along and support the hon. Gentleman. It is also a real pleasure to follow the hon. Member for Torbay (Kevin Foster), good friend that he is. He is back on the Back Benches now, but when we were on the Back Benches before, I used to follow him and he me. To be honest, normally, I follow everybody else—but it was a real pleasure to hear his contribution. I am also pleased to see the Financial Secretary to the Treasury in her place; I know she always generously tries to respond to our requests and I look forward to her contribution.

    I think we are all on the same page on this one. I very much support the two hon. Gentlemen who have just spoken and what they are trying to achieve. I hope to be able to achieve that as well. I am pleased to see the shadow Minister, the hon. Member for Ealing North (James Murray), in his place. We are a bit sparse in numbers on this side of the Chamber, but I know that the hon. Gentleman’s contribution will make up for that.

    Like many others, I am and was excited about the Government’s levelling-up agenda. I looked at the money for Northern Ireland and imagined how many improvements could be made with that funding. Like the hon. Members who have spoken and who will speak afterwards, I have been concerned that the levelling-up programme seems to gloss over the needs of coastal communities. The hon. Members for Waveney and for Torbay outlined their requests on behalf of their communities. I have not read the speech of the hon. Member for St Ives (Derek Thomas), who will follow, but he will probably endorse what we are saying as well. The hon. Member for Waveney gave his presentation of the subject at the start of the debate. It has been incredible to hear all of them.

    As a quick aside, I should say that as I travelled up the beautiful peninsular roads in my Strangford constituency to the airport on Monday, in cool, crisp air, my thoughts were not only on the condition of the roads and their iciness, but on the knowledge that the road verges were getting smaller and smaller each year, giving less space for slippage and increasing the danger of those winding coastal roads. That is part of the reason why I have advocated for levelling-up funds to address coastal erosion concerns. We can have all the wonderful attractions we like, but if villages and roads slide into Strangford Lough, those attractions will mean nothing for those places.

    Moving on, I want to highlight the concerns of small businesses. I always give a Northern Ireland perspective in these debates. I believe that it adds to the value of this great United Kingdom of Great Britain and Northern Ireland that we can all come together from four regions to debate these issues and thereby engender support for all businesses in the regions, just as I support my colleagues here in the mainland.

    In March 2022, most of the businesses in Northern Ireland—some 89%, or 70,510—were microbusinesses with fewer than 10 employees. Just over 2%, or 1,640 businesses, had 50 or more employees. Almost half of businesses in Northern Ireland—45% or 35,415 businesses—had a turnover of less than £100,000, while 10%, or 8,220, had a turnover in excess of £1 million. When the Government talk about percentages, I presume they are thinking in terms of thousands of pounds, yet the cost for many of these businesses is hundreds of pounds, which could cover the cost of, for example, pens, biros and pencils for their office. Yet, for a small business, these perpetual small increases can be the death knell. When the debate came forward, I was pleased to support it and add a Northern Ireland perspective.

    In Northern Ireland, our small businesses pay 30% more for the delivery of products. That is, in part, to do with the Northern Ireland Protocol Bill, but also the movement of goods. They seek to absorb some of the cost, and this finds their profit margin down to 15% to cover all overheads. With respect, the pressure on businesses in Northern Ireland is more acute than it is for those on the mainland. When rates are put up by a few per cent, it can mean business owners working for less than the minimum wage. There is probably more pressure today than there has been for a long time, so again this debate is relevant to my constituents and businesses in Strangford.

    Another struggling demographic is pubs. I support what both the hon. Members for Waveney and for Torbay said and will give my own perspective. Pubs pay more in business rates per pound of turnover than any other business. Both hon. Members referred to the hospitality sector, and that is a sector we are concerned about. I know we always come asking for things, but it is the nature of life that we seek to illustrate in these debates where our constituents are coming from. What help can the hospitality trade be given? I know the Government have helped in many cases, so this is not a criticism—I am not in the job of criticising; I am in the job of trying to find solutions, as others are.

    The business rates bill for the sector accounts for 2.5% of total business rates paid, despite only representing 0.5% of total rateable turnover—an overpayment of £570 million. When the hon. Member for Waveney introduced the debate, he clearly suggested that the rates for the hospitality sector, including pubs and restaurants, need to be substantially reviewed, because the overpayment does not reflect a fairness in the system. It is time to look at that.

    The draft ratings list for 2023 to 2026 shows pubs’ rateable values falling on average by 17%, which will start to address the overpayment, but there is still a long way to go, and we should look to the immediate concern. The extension of, and increase in, the hospitality business rates relief for 2022-23 was therefore extremely welcome. I always think we should give credit where credit is due. The Government have made some substantial moves, and it is important that we recognise that. The freezing of the multiplier and the abolition of the downward transition on relief were also welcome.

    However, the decision not to bring forward—this is one of my requests for the Minister—the online sales tax to offset the cost of pub rates and provide for a fundamentally fairer business tax regime for the digital age was disappointing. I ask the Minister to see whether that request could be looked at. It is important because it is one of the solutions. In these debates, the hon. Member for Waveney always sets out how we can do things better, and that is incredibly helpful. The current business rates system remains unbalanced. I join the British Beer and Pub Association in urging the Government to bring forward meaningful reforms that level the playing field.

    I will use a pun, which I think the hon. Members for Waveney and for Torbay, who spoke before, and the hon. Member for St Ives, who will follow, will perhaps appreciate, as they all come from coastal constituencies. Levelling up only works if the rising tide raises all ships and does not leave the essential but smaller craft marooned behind the yachts that are already away. It is about bringing the other ones on board—the smaller businesses, who are under incredible pressure. I ask again for greater consideration on those issues. I know the Minister will do all she can to try to address that.

  • Kevin Foster – 2022 Speech on Business Rates and Levelling Up

    Kevin Foster – 2022 Speech on Business Rates and Levelling Up

    The speech made by Kevin Foster, the Conservative MP for Torbay, in Westminster Hall, the House of Commons on 13 December 2022.

    It is a genuine pleasure to serve under your chairmanship, Mr Mundell. At the outset, I must congratulate my hon. Friend the Member for Waveney (Peter Aldous) on securing the debate and giving us all a chance to reflect on the impact of business rates and levelling up.

    Like my hon. Friend I represent a coastal constituency, although with a shoreline that faces east rather than west, and I do not want the levelling-up agenda to be based on a crude caricature of north versus south—often, the communities facing the greatest challenges lie on the southern coast. My hon. Friend did not speak for a moment too long; I found his points very interesting, and I was in great agreement with many of them with respect to how we need to change this form of taxation.

    Communities such as Torbay can see wealth alongside areas with challenges, and we need to see levelling up in not only the national context, but the local, with the clear aim of turning back the tide on poverty, which is affecting some of the communities that I am proud to represent.

    For Torbay, levelling up means looking to attract investment, which generates long-term jobs and ensures a genuinely vibrant local economy. That is where business rates can have such an impact. They effectively penalise businesses for investing in bricks and mortar, putting physical retail—not just, nowadays, high street retail—at a disadvantage to online outlets and potentially putting off development more widely across sectors such as tourism and hospitality, where a business rates liability will pretty much inevitably be created as part of a new investment.

    Business rates might have been an irritant in the past, but they can often be the make-or-break factor now, especially in light of the other pressures that businesses face. Business rates are the bill that is not flexible. That bill is enforced by the magistrates, and it is often the final blow, as it takes little or no account of the actual income that a business receives, as my hon. Friend mentioned. It is literally a tax on existence. Businesses must pay the tax simply to be in their premises, before they open the door to do any trade or business.

    Like my hon. Friend the Member for Waveney, I found the figures around rental revaluation extraordinary. It does not strike me that rental values for shops have fallen by only 10%, as on most high streets agents are offering businesses “Will you pay the business rates?” style deals on properties for certain periods of time. The figures do not reflect where rentals would have been five, six or seven years ago, or even a couple of years ago, before the impact of the pandemic.

    I will give a quick example of the impact of the cost of business rates, when combined with other costs. A company that runs four hotels in my constituency has, unsurprisingly, seen utility costs increase dramatically, meaning that the business needs an additional net income of £8 per room—a 12% increase—for all 125,000 room nights, just to pay the increased costs. That is simply not achievable in the current economic circumstances. The company pays £6.5 million in payroll to 470 employees in Torbay and spends £7 million a year through the supply chain, mostly in the west country. The moves we are seeing to increase wages are welcome, but they will mean the company will have a 9% payroll increase in April 2023. The retail, hospitality and leisure business rates relief scheme, which has been confirmed to be 75% for 2023-24, is welcome and it will offset around £300,000 of the additional costs for business, but it will not reach the wider amounts needed, as those bills still need to be paid.

    Similarly, another example is an innovative holiday park, with caravans that are the equivalent of staying in a hotel suite; the era of putting 50p in a meter is long gone—think caravans with widescreen TV and central heating. That business will potentially see its bill double, courtesy of its investment.

    While we often focus on the impact of business rates on our high streets and town centres, the impact is much wider, especially in situations where it is not an option for staff to work from home or from remote locations, such as in the manufacturing or hospitality sectors. A holiday by Zoom or a pub night on Microsoft Teams will not be the same experience; a physical premises is needed to deliver those experiences.

    What can be done? We need to look at providing further relief in the current system, particularly for small and medium-sized businesses. We need to realise that the days of retail and hospitality being a handy way to raise revenue for local services are now over. The high street corner is no longer the prime place to do business. There are department stores standing empty across many of our town centres, such as the former Debenhams on Torquay harbourside. We need not walk far from this Chamber to see what was once a large department store lying empty in what was a prime shopping area of London—a sight unimaginable back in 1990, when the uniform business rates were introduced.

    It is increasingly the presence of business rates liability that can directly and adversely affect the chances of levelling up a community by discouraging investment in commercial properties. That was one reason why I supported the previous investment zone suggestion that allowed business rate reductions in key areas that needed regeneration.

    Ultimately, a derelict and boarded-up building creates costs, not revenue, for the public purse. I urge the Government to look at what can be done further about business rates to ensure they do not become a barrier to the regeneration of our town centres, not least in the context of large national charities receiving a mandatory 80% relief, often increased to 100% relief by billing authorities. At the very least, parity for smaller businesses trading in retail, leisure and hospitality within our key areas for levelling up would be a welcome incentive, before finally getting on with what needs to be delivered: a major review of this form of taxation.

    It is oft talked about, but there needs to be a better option for the future in a system that is fundamentally rooted in the pre-digital era of economic activity, when physical premises were an integral part of doing business. I appreciate that that is easily said and harder done, not least when we consider the £25 billion of revenue that has been referenced. However, we should not shy away from doing it simply because it would be hard. Taxes have changed in the past to reflect economic, scientific and technological changes. The same is needed now.

    I cannot cover in a short speech every aspect of the links between business rates and levelling-up policy, alongside their impact. However, I hope the Minister in her response will reflect on how we need to consider the real disincentives of the tax for businesses such as hospitality, which must innately operate from a physical space, and the deterrent to operating retail from the high street, town centre or even the out-of-town shopping centre, which is facing huge competition. If we are to truly level up many coastal communities, those issues must be addressed and a revaluation on its own will simply not do that. If they are not, there is a danger that our taxation system, designed for an era when people went to a public payphone and had to go to a physical premises to buy something, will hit our town centres and not deliver the levelling up and regeneration that so much of Government spending is trying to achieve.

  • Peter Aldous – 2022 Speech on Business Rates and Levelling Up

    Peter Aldous – 2022 Speech on Business Rates and Levelling Up

    The speech made by Peter Aldous, the Conservative MP for Waveney, in Westminster Hall, the House of Commons, on 13 December 2022.

    I beg to move,

    That this House has considered business rates and levelling up.

    It is a pleasure to see you in the Chair, Mr Mundell. I am grateful to the Backbench Business Committee for granting this debate. It is extremely apt that the debate is taking place on the same day that the Levelling-up and Regeneration Bill returns to the House of Commons. If we can successfully reform business rates so that they are fair to businesses right across the country, that really will help to deliver meaningful levelling up.

    At present, with businesses having to contend with a level of inflation not seen for a generation, soaring utility bills and stubbornly high rents, business rates are a fixed cost from which occupiers cannot escape. They are an impediment to regional growth, and their impact needs to be significantly reduced, with the system being put on a long-term, easily understood footing. In that way, businesses will know where they stand and can then make long-term investment decisions.

    To be fair, all political parties have recognised the unfair and unjust nature of the current system and commitments have been made to both replacement and reform. From my perspective, I sense that the former—replacement—is the holy grail that is unachievable in the real world. To address the immediate threat that business rates pose to many businesses in different sectors and in different parts of the country, a wide variety of reliefs and exemptions have been introduced. Although welcome, they have made the system more complicated and difficult to comprehend.

    Currently, the Labour party is committed to abolishing business rates and replacing them with a system fit for the 21st century. As I have said, I sense that it will be impossible for it to keep that promise, because, despite the drawbacks that business rates possess, they have inherent advantages for the Treasury: they yield approximately £25 billion per annum, are relatively easy to collect and are difficult to avoid. It is impossible to find an alternative system of taxation that has those advantages, and I believe that it is important to get on with reforming the current system.

    Let me turn to the Government’s record. My right hon. Friend the Chancellor of the Exchequer made significant and largely welcome announcements in his autumn statement, which I shall detail later. However, I am mindful that we made commitments in the 2019 Conservative manifesto that we are yet to properly and fully implement. Those include carrying out a fundamental review of the system and reducing business rates in the long term for retail businesses, as well as extending the discounts to grassroots music venues, small cinemas, and pubs. Yes, we have provided a wide variety of short-term reliefs, but we have not yet provided the permanent fix that is so urgently needed.

    It is appropriate to briefly describe business rates. They are a tax charged to most non-domestic properties, although there are some exceptions, such as small businesses with a rateable value of less than £12,000. They are calculated by multiplying the rateable value of the property by the uniform business rate multiplier. The rateable value is an assessment of the annual rent that the property would achieve if it were available to let on the open market at a specific, fixed valuation date. The UBR multiplier for 2022-23 is 51.2p in the pound, or 49.9p for small businesses.

    Before I came to this place I was a chartered surveyor. Although I did not specialise in business rates, I did from time to time carry out business rates appeals. Invariably, that happened in situations with a lack of rental evidence on which to base an assessment of a property’s rateable value. As a result, it was difficult to agree a value, and there was the risk of a rateable value being imposed, which was abstract from reality and took no account of the ability of the business to pay and thus continue to exist and operate profitably. The Valuation Office Agency—the VOA—needs to be more transparent, open and collegiate in its dealings with businesses. I shall touch on that later.

    As I have mentioned, the Chancellor made some significant announcements in his autumn statement, which included confirmation of a revaluation that will come into effect from April; the freezing of the uniform business rate multiplier; the reform of the transitional relief scheme; a supporting small business scheme; and a 75% retail, hospitality and leisure relief worth up to £110,000 per business. The revaluation is generally to be welcomed, although there are some notable exceptions, as it will on the whole bring down rates in economically depressed areas while raising rates in areas where rental values have risen.

    The announcement that the downwards phasing of the transitional relief scheme for England is to abolished is good news, with upwards phasing being funded by the Treasury. The problem with transitional relief was that meaningful and full reductions in business rates, which businesses particularly in the retail sector desperately needed, took far too long to filter through. The measures will provide much needed support to help businesses get through the next few months, and they provide the foundation stone on which to now carry out the promised fundamental review.

    Despite those measures, which in many respects can be likened to the application of yet more sticking plasters and, indeed, bandages, fundamental flaws remain to be addressed. Although the Government froze the UBR at 51p in the last two Budgets, it remains unsustainably high. In no other country in Europe do businesses pay half the rental value of premises in property taxes. Set at such a high level, business rates deter investment in retail, leisure and hospitality. It should be noted that the UBR was just 34p in the pound when it was first introduced in 1990.

    The extension of business rates relief for retail premises from 50% to 75% in 2023-24 is welcome, even though it will help only smaller retailers because it applies to the first £110,000 of business rates paid. The Office for Budget Responsibility envisages that that relief will be removed from 1 April 2024, which would leave retailers with a massive tax hike at that point—in effect, a cliff edge. A tapering scheme will therefore need to be applied to overcome that particular problem.

    In the recently published valuation list, which comes into effect next April, the valuation of retail premises fell by only 10% across the country in the six years from the last valuation date of April 2015. Without the Chancellor’s measures on downwards phasing to freeze the UBR, business rates would have had a massive levelling down impact on all retail, and on depressed regions in particular. That underlines the need for fundamental reform.

    I shall move on to briefly highlight some of the inequities of the current system that need to be addressed. Business rates are a tax paid by businesses before a sale or a transaction has even been made. It is in effect a tax on existence rather than a tax based on success or failure. It therefore follows that it needs to be kept low so that it can be paid by all businesses. A high UBR discourages not only occupation, but investment in new accommodation and the physical expansion of existing premises. Ratepayers who have invested in improving their premises are penalised, as they then face higher bills. The system adversely affects physical retailers whose properties on high streets have significantly higher rateable values than the warehouses that serve online retailers. Similar challenges were faced by the hospitality sector.

    While in theory, with the current UBR, business rates should represent 51% of the rental value of a property and hence one third of the cost of occupancy, retail has been struggling, and some landlords have agreed much lower rents to enable their tenants to stay in business. Rents are increasingly being linked to turnover, and are thus disconnected from the rental values that are used by the VOA to determine business rates bills. Therefore, many retail outlets will be paying business rates bills in excess of their actual rent, even after the revaluation takes effect. In the new list, rateable values for retail have gone down by 10% on average. That is surprisingly little, given that many shops were closed and paying no rent at all at the valuation date of 1 April 2021, when we were in the midst of a covid lockdown.

    The valuation process that allocates properties their rateable value is not transparent, with the VOA not sharing the evidence that it uses to substantiate the basis of valuations. The only way for occupiers to assess that evidence is by challenging the valuation through the “check, challenge, appeal” process, which is lengthy and costly. There is therefore much concern that many challenges to the valuation process will be submitted over the coming months. The worry is that the VOA uses flimsy evidence when conducting property valuations. Those businesses that engage with the VOA through the appeals process, or by providing evidence leading up to the valuation, have more accurate valuations, while those that have not seen any reductions have not engaged with the VOA.

    The VOA has outlawed 400,000 applications made by businesses in mitigation of rates bills on the basis of covid-19. Its view is that covid did not constitute what is known as a “material change in circumstances”, which can lead to a reassessment of a rateable value. That decision has been justified by the VOA on the basis of the allocation of the £1.5 billion covid relief fund, the distribution of which was devolved to local government. While some local authorities have been quick to distribute that relief, others have been slow. The lack of a uniform distribution mechanism has meant that receiving the relief payments is dependent on where the occupant is based, and a postcode lottery has, in effect, been created.

    In the autumn statement, the Chancellor froze the UBR at 51p for one year only—that is, for 2023-24. As mentioned previously, the OBR’s figures indicate that the UBR will be index-linked thereafter. That means that as matters stand at present, business rates for retail premises will rise from April 2024. The Government have extended their 75% rate discount for shops paying up to £110,000 in rates until 2024. Likewise, unless the Government extend the relief, occupiers will again face a cliff edge when the scheme expires.

    The Government will soon be bringing forward a non-domestic rating Bill. It is important that the contents of that Bill are fully debated, and that the opportunity is taken to ensure that it is a vehicle for delivering the fundamental reform of business rates that was promised in 2019. The Bill will include provisions such as the duty to notify of any change to a property; changes to the frequency of revaluation; and the removal of the need for transitional relief to be fiscally neutral. Alongside the duty to notify, there should also come a corresponding duty on the part of the VOA to share with occupiers the evidence it uses to assess rateable values.

    Due to the complexity of the business rates system and the burden on ratepayers, occupiers quite understandably often seek advice from rating experts on how best to approach the whole process. Unlike with other professions, rating advisers do not need a licence to practice, resulting in some operators giving bad advice and cheating people out of their money. We need to find a way to outlaw such conduct.

    Currently, property owners do not have to pay business rates on empty buildings for three months. After that period ends, most businesses have to pay business rates in full, although there are some exceptions. The outcome of the 2020-21 review was that the Government committed to an empty property relief consultation in 2022, but that has yet to take place. It is important that the relief is extended—it is probably best to extend it to 12 months—because rates will then be paid exclusively by revenue-generating businesses.

    It is appropriate to highlight the particular challenges faced by the hospitality sector, which is a vital component part of many local economies all around the UK, including in the Waveney constituency that I represent. With a fair business rates system, the sector can play a key role in levelling up.

    Looking at the revaluation list in the Waveney area, businesses that have invested and that are vital engines of local economic growth are being heavily penalised for their ambition and success. By way of example, the rateable value for the Kessingland Beach holiday park is due to rise from £291,450 to £388,500; for the Harbour Inn in Lowestoft, it will rise from £23,500 to £45,000; and for the Commodore in Oulton Broad, it will rise from £67,500 to £79,000.

    The current system sees the hospitality sector overpay nationally by £2.4 billion a year relative to its turnover; in other words, it overpays by 300%. In the short term, the differential rates between large and small businesses should be removed and the eligibility rules for reliefs based on rateable value should be abolished. In the longer term, a significantly reduced UBR multiplier should be introduced.

    To address the variety of problems that I have outlined, root-and-branch reform is urgently required. Business rates would be fairer and better if the system was simplified, the tax base broadened by removing the myriad complicated reliefs, annual valuations proposed, a one-year antecedent valuation date set, and fast appeals and greater evidence-sharing between occupiers and the VOA introduced.

    Such reform could be achieved by making the following changes. First, the UBR could be reduced by 30%. By way of example, reducing the UBR from 51p to 34p, which was the rate in 1990, would reduce unsustainably high levels of business rates on retail and hospitality premises, and level the playing field for so many businesses. A lower UBR would also reduce the barriers to entry, expansion and innovation, thereby encouraging growth and broadening the tax base. In effect, this would plug the gaps in revenue that the Treasury might fear would result from a lower UBR.

    Secondly, the Government have correctly moved from five-yearly to three-yearly valuations. That represents a step in the right direction, but yearly valuations would be far more equitable. By implementing yearly valuations, business rates would accurately reflect the dynamic movements of the market and allow occupiers to benefit immediately from changes to rateable values. The increased incidence of events such as the covid pandemic and the war in Ukraine further emphasise the need for a system that is able quickly to react to rapidly changing economic conditions.

    Thirdly, we need to look at the abolition of the system of complicated reliefs. Instead of the fundamental review that was promised, the Government have continued to apply sticking plasters to the system to ensure its continued functioning. That has culminated in a system of complicated reliefs that can be difficult to navigate. The business rates system comprises 12 reliefs. Those would be rendered unnecessary with the lowering of the UBR, which would mean a business benefiting from paying lower rates immediately instead of negotiating and navigating the VOA system of reliefs.

    Fourthly, many of the problems I have detailed could be fixed by making the VOA more efficient. Its systems, which are predominantly paper based, are not fit for the 21st century. Digitisation would enable the VOA to make its collection systems more efficient and it could take a big step towards systems efficiencies such as annual valuations. The Government recently published a consultation to that effect, entitled the digitalising business consultation. However, unfortunately, it largely missed a point because instead of consulting on the measures that would reduce the administrative burdens on businesses and ratepayers, the Government are trying to increase those burdens by requiring more information so as more effectively to target reliefs.

    I sense that I have spoken for far too long, and you will be pleased to hear, Mr Mundell, that I am nearing my conclusion. High business rates hold back economic growth, are a barrier to levelling up and are an added burden that many businesses simply cannot afford at present. To be fair, the Government have listened, and they are aware of the problem. The response has been the introduction of short-term reliefs, which are welcome, but they complicate the system further in the longer term.

    We need to stop searching for that elusive holy grail and stop kicking the can down the road. Instead, we need to introduce pragmatic measures that can be delivered quickly, and we need to honour the commitment to a fundamental review. I therefore urge the Treasury to introduce those initiatives—in the spring Budget, I would suggest—and in the first instance I look forward to hearing the response from my hon. Friend the Minister.